Pricing tricks of the retailers

Product is sold at an inflated price for a limited period at low volume in just a few stores, then rolled out across all stores at the lower price - known as "yo-yo pricing"

The "discount" price period lasts much longer than the original higher price period, making the discount price really the normal selling price

Charging one price in store A, a lower price in store B, then saying "was £x, now £y" when the higher price was never actually charged in store B

Saying a product price has been reduced without mentioning that this is only because the package size has shrunk

Buy One Get One Free deals where the same volume of the same product can be bought more cheaply in a larger pack

Source: Office of Fair Trading

The OFT says that "half price" or "was £3, now £2" offers must be sold at the new discounted price for the same, or less, time than the previously higher price.

This would prevent short-term, artificially inflated prices masking the offer.

Items that suggest they are "better value" because they are in a "bigger pack" must have a comparable product elsewhere in the same store,

"Shoppers should be able to trust that special offers and promotions really are bargains," said Mr Maxwell.

"Prices and promotions need to be fair and meaningful so shoppers can make the right decisions. Nowhere is this more important than during regular shopping for groceries.

"[This] provides supermarkets with a clear benchmark for how they should be operating so that their food and drink promotions reflect the spirit as well as the letter of the law."

Richard Lloyd, executive director of consumer group Which?, said: "When household budgets are squeezed and food prices are one of people's top financial worries, it's unacceptable that shoppers are confused into thinking that they're getting a good deal when that might not be the case.

"Regulators should be prepared to take enforcement action against traders found breaking the rules."

A Which? investigation in May suggested that some customers had been misled by supermarkets over discounts and multi-buy offers.

It analysed more than 700,000 prices and suggested that in some cases "discounts" ran for much longer than the original price. Following that investigation, some supermarkets admitted isolated errors amid a huge volume of pricing.

'Inconsistency'

Misleading advertising is illegal under the 2008 unfair trading regulations, and the OFT is not making any recommendation that the law should be changed.

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The regulator said it did not discover any illegality during its investigation, but did find some "inconsistency" in the way the law was interpreted and applied.

Meanwhile, nearly 40% of fast-moving consumer goods could be on some sort of promotion or discount.

Many of the supermarkets said they were happy to work with the OFT.

"We will continue to ensure that our pricing and promotions are as clear as possible for our customers," said a spokesman for Sainsbury's.

The Co-op said: "We understand how important it is for shoppers to be able to easily understand what the promotional offer is, so they can spot the best deal, and we are committed to providing clear and accurate labelling for our customers so they can make informed purchasing decisions."

Aldi said it supported any initiative that encouraged "transparent pricing and a fair deal for consumers", although the agreement would have no effect on its own prices.

A Marks and Spencer spokesman said: "It is right that we sign up to these new guidelines."

A Morrisons spokesman said: "We are happy to sign up to the OFT's principles because they reflect good promotional practice."

Tesco said it welcomed the OFT's "clarity" and that it supported the regulator's wish to see a consistent approach to promotions across the supermarket sector. Waitrose said it was also supportive and always ensured pricing was clear and transparent.

Comments

Comment number 206.

SooooooCloseComment number 206 is an Editors' Pick30th November 2012 - 11:19

Don't really need a special code. Just more Shopper Awareness! Examples I have seen recently, where a four pack of energy drink was priced at 4.50- the Individual cans were £1 each... 50p for the cardboard?

And these run throughout the stores, like with cereals, and the 500g box being X the 750g being X and 1KG at a discounted X. Where if you look closer 2x 500 would be cheaper

Comment number 205.

Phil30th November 2012 - 11:22

you all know this just means they won't bother with the deals and just have the inflated prices right? I dont usually bother with "deals" because I like what I like, and something being cheaper doesnt really make me want to eat it

Comment number 204.

Ppuj30th November 2012 - 11:21

189. Vboulderer I did not say the dim don't need protecting I am simply saying this is what it is for. It is a shame people do not realise at a young age that business, people, government, they all want a bit of you.If you are not smart then they will get it. If you don't look carefully and use your brain then you will be fleeced. This does not stop at the supermarkets it is in every walk of life

Comment number 202.

wysiwyg30th November 2012 - 11:19

Supermarkets make you pay for Convenience thats all. Walk to the high street you will get a better deal. Bakeries, butchers, fruit and veg shops all offer most of these products at nearly half the price. And a lot less crisps, booze and chocolate. Councils don't help because they don't offer anywhere to park your car - only attracting retired or poor people. They hate constituents & retailers.

Comment number 199.

shopmanager30th November 2012 - 11:13

As a " rough rule of thumb " any discount of more than 20-25% is usually a bit of a fibb !! - because after VAT the average mark up on most mainstream goods is 30-38 % . Be very suspicious of big discounts on own brand goods - how can you check with other retailers for the best price on an own brand product ?

Comment number 198.

AlErgic30th November 2012 - 11:18

What on earth has happened to this country? Every business and politician is out to con the general public. It seems laws have to be introduced simply because of greedy CEO's and their cronies. And once again they all act as monopolies following each others con of the month.Buy a packet of trust and get a free packet of gotcha.

Comment number 197.

Sagacity30th November 2012 - 11:17

Another trick they sometimes play nowdays is with the assumption that buying bulk or larger pack size is cheaper, In Morrisons at least if one looks at the unit price on the shelf price or calculate it if they've decided to use different unit measures for different pack sizes then the unit price for the larger pack is often higher than that for the smaller pack

Comment number 192.

theSteB30th November 2012 - 11:13

I know why Asda hasn't signed up because they are terrible at raising prices, simply so they can advertise it as a reduction a few days later. They have lots of things on "roll back" i.e. reductions, and I have never seen thiese items at any other price for months. Very few of their supposed reductions are real reductions. Most have been put up, simply so they can say they are reduced, days later.

Comment number 191.

CRITICUS30th November 2012 - 11:12

If I understand this correctly it only relates to special offers. 2 things irritate me: When larger jars/tins/packets etc. are more expensive per gram/liter than smaller ones. When I have to go and weigh items using the fruit / veg section scales because one version is priced per gram and one per unit.

Comment number 190.

Back to top30th November 2012 - 11:12

@ 132 Cheese and BiscuitsI don't disagree with you but if you divide something up into much smaller quantities the price doesn't seem so high. For example paying tax at around 80p a litre doesn't sound as bad as £3.64 tax does on a gallon. Therefore, I think it helps to disguise the real amount of the tax you are paying on fuel.

Comment number 189.

Vboulderer30th November 2012 - 11:12

174.PpujThese regulations are to protect the dim.....That is what being smart is all about...not to feel constantly frustrated that you are a loser.

So with comments like that, I'm assuming you constantly feel frustrated? Again, why is there an issue with protecting the vulnerable? I personally see being smart as a way to better society and make a fairer place to live with equality.

Comment number 188.

isiComment number 188 is an Editors' Pick30th November 2012 - 11:12

Consumers have the power to vote with our feet. Supermarkets are well aware that we are not as good as we were at shopping around and settle for convenience of buying in one place. In that sense we have got what we deserve. Save a fortune by buying the amount you need, not what’s packaged, from fruit & veg shops butchers etc – and it’s the freshest possible! It’s not rocket science.

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